Kusserow’s Corner: Home Health is Among the Most Vulnerable Programs for Fraud

Programs to assist the elderly, people with disabilities, and individuals with chronic or temporary conditions so they can remain in their homes and the communities. However there is a rising concern about this program’s vulnerability to fraud. In 2011, CMS announced that the federal government had recognized vulnerabilities in the programs and would be increasing their scrutiny of those participating in the program. This has certainly been the case. Last December, the HHS Office of Inspector General (OIG) issued a report that stated Medicaid costs for personal care services in 2011 totaled $12.7 billion, a 35 percent increase since 2005. Home personal care is one of the fastest growing job categories in the country and a growing concern for the increasing number of cases of fraud that have been identified. The OIG noted numerous problems in Medicaid personal care services that leave it vulnerable to improper payments, abuse, and fraud, including lack of training standards, uneven oversight of services provided, and failure to implement prepayment controls to prevent improper or fraudulent payments.

In the meantime, the Department of Justice (DOJ) and OIG have continued identifying, investigating, and prosecuting home health fraud cases. Hardly a day passes without the DOJ announcing new indictments, convictions, and/or sentencing of individuals involved in home health fraud. Most of the cases involved kickbacks and falsification of documents submitted to Medicare for payment. The latest comes from Detroit, where on September 12, 2013, Muhammad Shahab was sentenced to 50 months in prison, three years of supervised release, and order to pay more than $10.8 in restitution along with his co-defendants for a fraud scheme almost $11 million Medicare fraud. Shahab admitted that he and his co-conspirators recruited and paid cash kickbacks and other inducements to Medicare beneficiaries in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had visited Patient Choice and All American for the purpose of receiving physical or occupational therapy. A large number of the beneficiaries were neither homebound nor in need of any physical therapy services. Shahab admitted to securing physician referrals for medically unnecessary home health services through the payment of kickbacks to physicians or individuals associated with physicians. He further employed several physical therapists and physical therapy assistants to sign medical documentation needed to begin billing for home health care services, including initial payments and payments for each visit to a Medicare beneficiary that were not medically necessary or performed.

Other recent cases involved guilty pleas in a $20 million home health care fraud case in Miami that was related to a different Miami case involving $50 million in fraud. This month had yet another Miami case where guilty pleas were made by principles of an additional home health agency front used for fraud that involved $48 million. A few days earlier a Los Angeles man was sentenced to prison for receiving more than $1 million in kickbacks by recruiting homeless people on Skid Row as part of a Medicare scheme; in July, 15 individuals were charged in Illinois for engaging home health agency fraud. All of these cases are just examples of the crackdown taking place. In all of these cases have had similar methods of operation that included:

  1. A home health agency front
  2. Kickbacks for referral of beneficiaries to recruiters
  3. Kickbacks to physicians, physical therapists, or other care givers to assist in the fraud
  4. Falsification of information used for submitting claims
  5. Billing Medicare for services not performed or unnecessary

It is reasonable to expect more fraud cases to be brought into the justice system. Furthermore, the OIG set aside a section in its 2013 work plan for Home Health Services on a variety of program integrity issues. The OIG’s objectives include finding ways to curb fraud with better controls.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC. Published with permission.